How to Manage When Cash Is Tight


QuickQuid-How to Manage When Cash is Tight by Darwin_imageIt’s not uncommon to find yourself tight on cash at various times in your life. How you handle these situations is key to your future financial well-being. There are a few steps you can take to help manage your finances and set yourself up for future success:


  • Analyse and acknowledge the situation – One of the first steps to solving a problem is to roll up your sleeves, really analyse the situation and admit there’s a problem. List out all open debt, recurring bills and routine monthly expenses. Try using a spreadsheet program to take a detailed look at your expenses.
  • Prioritise payments that CAN’T be missed – When cash is tight and it becomes obvious that certain payments are likely to be missed, start thinking about what the priorities are and where the penalties are going to be the worst. For instance, the mortgage is a key priority, as you don’t want to get into a bad situation with the landlord. Meanwhile, there might be minimum payments to make on the credit card. You might be able to defer certain payments by simply calling the company, school or whatever entity is owed and ask for some additional time or to be able to pay in small instalments.
  • Reset spending priorities for the month – Now is the time to take a look at what you’re spending money on during the month. If you find yourself short on cash during particular months, it’s time to focus only on needs and not wants. Many social outings, clothes purchases, ordering out and other premium expenditures need to be curtailed. If this seems too drastic, realise that this isn’t a permanent solution and some of these spending categories can return once things improve.
  • Identify cost-cutting opportunities – Chances are, there are some cost-savings opportunities on either recurring or one-time expenses. For instance, buying in bulk, buying certain things in-season, or outright negotiation for goods and services can result in big savings over the course of a year.
  • Make extra money – Although it may not always be as simple as it sounds, one of the assets you may have on your side is time. By finding one or two side jobs that are relatively flexible, you may be able to plug gaps in your budget by working a night or weekend here and there. Again, once your situation improves, you could forgo the second job, but when in a crunch you have to take extreme measures to get on the right track.


The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.




Darwin is an engineer and MBA who takes an "evolutionary" approach to finance, writing about adapting to evolving financial management, tax, investing and savings opportunities. Making more money and saving more money is an adaptive process — join the evolution! He blogs at Darwin's Money and ETF Base

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